Due: September 29, 2008
Bornstein, Elisha Dov
Delinko, Matthew Edward
Mohr, Kyle D
Gatorade is a dominating force in the sports drink industry. The company has had a sustainable competitive advantage for over 40 years by means of constant product innovation. By repeatedly analyzing its marketing environment, the company has been able to maintain their advantage, keep their share of markets, and capture shares of new markets. Strengths
One of Gatorade’s most noteworthy strength’s is its commanding share of the “active thirst” market, approximately 80%. (Portfolio.com) This makes Gatorade a cash cow for the Pepsi Company as growth is fairly calm. As evident by its impressive share of the market, Gatorade is an extremely popular brand and has outstanding brand recognition and loyalty. The company currently offers three lines of products: its Performance Series, Thirst Quencher, and Propel Fitness Water. The Performance Series appeals to athletes participating in demanding physical tasks and includes energy bars, nutrition shakes, specialized sports drinks, and energy drinks. The Thirst Quencher line offers the original Gatorade formula in a variety of flavors varying from the original flavors to morning flavors to Latin-inspired flavors. The Propel Fitness Water line offers an alternative to water drinkers who want a little more flavor and vitamins that water bottled water doesn’t have. All three of these lines combine to cover much of the sports drink market and beyond. Athletes need a way to refuel while they are engaging in their physical activities and Gatorade offers a solution. Unlike water, Gatorade drinks contain electrolytes that athletes lose when they sweat. Gatorade also has a wide array of flavors for consumers to choose from while water only has one. Most energy drinks are at least lightly carbonated and heavily caffeinated while Gatorade is not. Drinking carbonated beverages during a workout can cause cramping and drinks high in caffeine provide a quick burst of energy followed by a steep crash. Gatorade products provide a more stable supply of energy that is carbohydrate-based. Gatorade recently released its low-calorie G2, “the single-biggest new product innovation in Gatorade’s history.” (Pepsico.com)This product is a response to the popularity of lower calorie yet flavorful drinks and should do well among calorie-conscious consumers.
Gatorade faces several challenges when it deals with their marketing strategy. Gatorade has always marketed to people who are active in sports. Recently, Gatorade has been losing market share to many of the new competitors in the sports drink business. These new competitors, such as Vitamin Water, have been marketing towards people’s active lifestyles, not just to athletes. Other companies have begun using celebrities and athletes to promote their sports beverage, something only Gatorade used to do. Vitamin Water has started to target “...athletes with celebrity endorsements by the likes of LeBron James and Kobe Bryant alongside 50 Cent and Kelly Clarkson” (MacArthur, 2008). These athletes and celebrities have helped other products gain brand recognition, which is hurting Gatorade and its market share.
The energy drink was invented in 1965 at the University of Florida. Gatorade has grown internationally to nearly 80 countries such as Europe, South Africa, Asia, and Canada available in more than 50 different flavors (The Gatorade Company Fact Sheet). Gatorade introduced new products such as Gatorade AM in 2007, Gatorade Rain in 2006 to remain competitive. In 2008 the Gatorade Company and Tiger Woods, the world‘s # 1 golf player, joined forces to create a new beverage drink well know as Gatorade Thirst Quencher. Also, over the years, Gatorade has partnership with several organizations. For...